Honolulu faces a critical question: Can small, second homes on existing lots — accessory dwelling units — relieve our ongoing housing shortage?

After nearly a decade of allowing ADUs, the city has permitted only about 1,320 units since 2015, far below initial expectations. This shortfall suggests that the state’s 2024 mandate to allow two per lot will need stronger follow-through to meet its goals.

As Civil Beat’s Ben Angarone reported, Honolulu has fallen short of expectations for ADUs because of familiar constraints. These include sewer-capacity triage, small lot sizes, high construction costs and a sluggish permitting system. The city also shelved an initiative to provide pre-approved ADU plans this year after industry pushback.

The promise of ADUs is straightforward. They are small, backyard or attached apartments that can increase housing supply without changing the outward look of a neighborhood. In theory, they can offset exorbitant housing prices, support affordability, make it easier for families to live together across generations, and help seniors age in place. That theory has been most visibly tested in California, where ADUs have become a central component of new housing production.

So what would it take to make ADU programs successful in Hawai‘i? Here are a few takeaways from other states.

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Research from the Harvard Joint Center for Housing Studies and the Urban Institute points to one reform above all others: giving homeowners a statewide right to build ADUs if they meet basic standards. This shift required local governments to approve applications that were compliant. It prevented them from layering on the kinds of zoning rules and procedural hurdles that had long slowed approvals. Where permits remained subject to local discretion, production lagged.

In California, once these reforms took hold, annual ADU permits surged.

It’s worth noting that the surge added supply, but it didn’t solve affordability. As the Los Angeles Times noted, California’s total housing stock grew by just 0.84% in 2024, with ADUs making up roughly one-fifth of that increase. While overall supply remains an issue, market-rate ADUs, like all housing units, command a high price.

By-Right Approvals

For Hawaiʻi, the lesson is ADUs won’t solve the housing crisis on their own, but they can contribute meaningfully to our housing supply if rules actually let them be built. And implementing simplified, statewide standards alongside by-right approvals is the proven yet controversial way to make that happen.

The challenge comes down to the fine print. States like California, Oregon, Washington and Montana successfully paired by-right approvals with statewide standards like limits on owner-occupancy mandates and other locally imposed requirements.

Owner-occupancy requirements are championed as measures to prevent absentee landlords and speculative development.

This may work for places that are not yet suffering from foreign and out-of-state investors flooding the market. Hawaiʻi isn’t one of those places; we’re already overrun. Further, experience elsewhere shows the risk of investor-owned ADUs is overstated.

Even in cities without owner-occupancy mandates, most ADU owners still live on site. Portland, for example, found nearly two-thirds of its ADU owners were owner-occupants.

And while occupancy rules are one of the most visible barriers, they are hardly the only ones. Honolulu still layers on large minimum lot-size requirements, subjective design standards, and other conditions that make the process unpredictable. When rules feel arbitrary, most homeowners walk away. That reluctance feeds into a cycle: few ADUs get built, lenders see little reason to develop financing tools, and builders never develop the expertise to scale.

Breaking that cycle requires straightforward, predictable standards that give owners, banks and contractors the confidence to move forward. Without that, state-level efforts like Act 39 of 2024 (Senate Bill 3202), which increases the number of allowable ADUs, will continue to fall flat. And early drafts of the Senate bill suggest that some legislators already knew that.

Are We Willing To Take The Risk?

The original bill required counties to allow at least four homes per lot in urban districts and to approve small-lot subdivisions of 1,200 square feet or less. It also prohibited counties from requiring owner-occupancy in ADUs. That was pared back in the Senate’s second draft to allow three units per lot, increase minimum lot sizes to 2,000 square feet, and require subdivision reviews rather than approvals.

By the time the final version passed as Act 39, all language that resembled by-right approvals or statewide standards was stripped out, and the only provision that matched the original bill was a ban on future private covenants that restrict long-term leases and ADUs in residentially zoned urban districts.

Even then, the opposition was strong. On final passage, 36% of the Senate and 43% of the House voted no. The arguments against the bill were familiar: home rule, overcrowding and doubts that ADUs could ever deliver affordability. Those are not trivial concerns, but they also reflect a deeper political fact: any meaningful expansion of housing supply in urban districts will require politically risky action that stirs localized opposition.

Today, ADUs are one of California’s only reliable sources of new homes.

California took the risk and proved the reward. In 2016, its legislature established a right for homeowners to convert existing spaces like garages into ADUs. The following year, it eliminated most parking requirements. In 2019, it created a by-right approval for detached ADUs, prohibited owner-occupancy mandates, capped setback requirements and established statewide standards for minimum lot size and floor area.

By 2023, legislators had passed 16 separate ADU bills designed to streamline permitting, preempt municipal restrictions with statewide standards, and increase construction. Today, ADUs are one of California’s only reliable sources of new homes.

So the question for Hawaiʻi is not whether ADUs are the whole answer. They are not. Rather, we must ask if we are willing to do what it takes to make them part of the answer. Who benefits when we stall out on production in urban districts? And who benefits if we finally let homes be built?

At some point, the state will have to make a choice. Either we get serious about passing the reforms other states have proven can make ADUs workable — by-right approvals, statewide standards and time-certain permitting decisions — or we stop talking about them as part of the solution.

Californians survived the politics and built new houses. Can we do the same?